Risk Score
Pending analysis
Investment Range
$142,950 - $236,400
Franchise Fee
$15,000
Min Cash Required
$20,000
Total US Locations
6
Business Summary
Poké Rainbow operates fast-casual restaurants that offer fresh, Hawaiian-inspired poké dishes under the brand name POKÉ RAINBOW. Franchisees own and operate these businesses, which typically require staff to assist in daily operations, at their own facilities, following Poké Rainbow's standards and specifications.
Corporate History
Poké Rainbow Franchise LLC was formed on June 8, 2018, in California, and began offering franchises in September 2018. Before the franchise company was established, Poké Rainbow's CEO had been operating a similar business under an affiliate since July 2016 in Van Nuys, California. Since 2019, Poké Rainbow has expanded its network with additional affiliate-controlled locations opening in various cities across California through 2021.
Financial Overview
Investment Range
$142,950 - $236,400
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$29,900
Minimum Cash Required
$20,000
Royalty %
5.5%
Marketing %
1%
Equipment Costs (Low)
$67,000
Equipment Costs (High)
$133,500
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Disclaimer of opinion
Financial Health Notes
The financial statements for Poké Rainbow, as disclosed in Item 21 and Exhibit F, prompt the franchisor to highlight a special risk regarding its financial condition. Specifically, Poké Rainbow's financial health raises questions about its ability to provide franchisees with the necessary services and support. This indicates potential financial instability or limited resources within the company.
Financing Details
Poké Rainbow does not offer any direct or indirect financing to its franchisees. This means Poké Rainbow will not provide loans for the franchise fee, equipment, inventory, or any other startup costs. Franchisees are responsible for securing all necessary funding from third-party lenders or other sources, and Poké Rainbow will not guarantee any notes, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
6
Franchised Units
1
Corporate Units
5
Avg Square Footage
1,150
Franchising Since
2018
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Poké Rainbow has no litigation required to be disclosed. This means Poké Rainbow, its predecessors, parent, or affiliates, and the executives listed in Item 2, have not been involved in any material litigation, such as actions alleging franchise law violations, fraud, or unfair practices, nor have they been subject to any injunctive orders or criminal convictions that typically require disclosure in an FDD.
Bankruptcy History
Poké Rainbow has no bankruptcy history to report for itself, its predecessors, parent, affiliates, or any of the individuals listed in Item 2 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew their Poké Rainbow franchise agreement, franchisees must have fully complied with all provisions of their agreement throughout its term, made all necessary capital expenditures to maintain uniformity with the System, and satisfied all monetary obligations owed to Poké Rainbow or its affiliates. They must not be in default of any agreement with Poké Rainbow, provide written notice of their intent to renew 9 to 12 months before the current term ends, and sign Poké Rainbow's then-current franchise agreement (which may have different terms). Additionally, franchisees must comply with current qualifications, agree to new training requirements, sign a general release of claims against Poké Rainbow, and pay a $2,500 renewal fee.
Training & Support Program
Franchisor Assistance
Poké Rainbow provides initial training to franchisees and up to two managers at its Van Nuys, California headquarters, covering topics like operations, marketing, and regulatory compliance. It also offers opening assistance and guidance. After opening, Poké Rainbow provides ongoing advice on business matters such as sales, operations, and marketing, and conducts periodic visits to offer consultation and guidance, potentially issuing written reports. Poké Rainbow requires franchisees to spend 1% of gross revenue on local advertising and may establish a national advertising fund, which could require contributions up to 1.5% of gross revenue. Franchisees must use designated computer hardware and software, including Square POS, and provide Poké Rainbow independent access to their business's digital information.
Initial Training Hours
83
Training Location
Van Nuys, California
Ongoing Support
After opening their business, Poké Rainbow franchisees receive ongoing advice and guidance on various operational aspects, including sales techniques, accounting procedures, and marketing strategies. Poké Rainbow representatives will conduct periodic, announced or unannounced, visits to the franchised location to provide consultation and assistance, and may issue written reports suggesting improvements. The franchisor also makes ongoing training programs available as it deems necessary, with franchisees required to attend no more than two in-person programs or four full days of training per calendar year, covering their own travel and living expenses.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Absentee Allowed
Territory Type
exclusive
Territory Size Requirements
Poké Rainbow awards franchisees a protected and exclusive marketing territory. This territory will be the lesser of a 1.5-mile radius around the franchised business location or a land area with a population of 20,000 people. The exact boundaries are determined on a case-by-case basis by Poké Rainbow, taking into account factors like population base, area demographics, traffic patterns, proximity to major roads, available parking, and market penetration.
Staffing Notes
Poké Rainbow does not require the franchisee to be the direct, full-time, day-to-day operator of the business. If the franchisee chooses not to operate on a personal basis, they must hire and retain a full-time, on-site manager or operator. Poké Rainbow reserves the right to approve or reject any proposed manager and can require the approved manager to complete its initial training program before the business opens. Franchisees are responsible for compensating their managers and must keep Poké Rainbow informed of their manager's identity. If a manager needs to be replaced, the new manager must be approved by Poké Rainbow within 60 days and may be required to attend training at the franchisee's expense.